Multiple location retailers
In the last twenty years, the UK has seen rapid growth in the retail industry. Most small towns and cities will have the same brand name outlets. Even though we’ve said there has been growth, we recognise retailers are in a challenging environment. Margins are tight and competition is high and retailers that grow and thrive are worthy of huge praise.
All of the big brand retailers we see, started with one or two shops.
Single location insurance options
A retailer that owns and runs a single outlet has a couple of options. The most popular is to arrange a shop insurance package policy. Business insurers have, over the years, developed bespoke products for particular trades. Retailing is the main industry served by these package policies. A shop package policy includes the typical covers a shop owner may need.
The other, less popular option, is to arrange a commercial combined insurance policy. A combined policy is one where you pick and choose the covers you need. A retailer may want to cover liability and stock insurance only. As a broker, we would not recommend this. This is the clients choice though.
Multiple location insurance options
Despite the hugely competitive nature, there are many independent retailers that operate in more than one location. Usually they’ll start with one outlet and then expand into nearby locations. This means that they will have started with a single location policy, probably a package.
If they open another outlet, there are two main options open to them.
Option 1 – a single shop insurance package
Most business insurance companies will allow there to be more than one risk address, or location, on one policy. There are a few though who, are not quite so advanced and, only offer one shop insurance package per location.
Those that do allow more than one address may restrict the total number that can be covered on one policy. The normal maximum is five.
There is usually a premium benefit to insuring two risks on one policy. The reason is that insurers understand it is less likely that both locations will suffer a loss in one year.
The other benefit to the client is that they only have one annual renewal date to remember. Whenever the second risk is added, the policy annual renewal date remains the same.
Option 2 – individual shop insurance package policies
Some retailers choose to have a new policy for each location. If they treat each outlet as a separate business unit, this helps with individual accounting and cost allocation.
We’ve said above that there may be a premium benefit in putting two risks on policy. A similar thing happens where there are two outlets on two separate policies. If they’re with the same insurer, they’ll usually allow a multi-location policy. However, you need a broker to negotiate this with the insurer in most cases.
Option 3 – commercial combined insurance
There is a third option, which is less used. Instead of individual or multiple shop insurance package policies, a commercial combined insurance policy is arranged.
This is normally where there are five or more locations and a package is not suitable.
Using a business insurance broker
Whichever option you’re considering, there are benefits to using an independent broker. Their role is to consider your insurance demands and needs and to suggest options for you. If you have a number of premises, you can ask a broker to quote individual and multiple policies. If you choose to quote online, you do not always have these options available.